A points system will be developed to favour the applications of highly skilled immigrants to work in Britain. Skilled workers will be allowed to settle permanently if they speak English and satisfy a "Britishness test".
The waiting period to settle in the UK will increase from four years to five. There will be tougher restrictions on bringing in relatives.
Employers caught using illegal workers will face a pounds 2,000 fixed-penalty fine for each case.
Asylum-seekers will lose the right to stay permanently, instead being granted temporary leave to remain for up to five years. There will be more detentions of asylum-seekers and swifter returns of those who are rejected.
It has been on the agenda for the past five years with public concern over border controls heightened by pictures of asylum-seekers trying to jump on cross-channel trains and lorries.
William Hague attempted to make political capital out of the issue in the 2001 election. But Labour attempts to neutralise it have been hampered by the resignations of Beverley Hughes as Immigration Minister and David Blunkett as Home Secretary, both partly because of the much-criticised immigration system.
Cabinet ministers were warned last week that immigration and asylum was the one area in which Labour lagged behind the Tories.
It was undoubtedly canny politics for the Conservatives to release their plans before Labour issued its strategy. But ministers insist they have been working on their plan since April, when Tony Blair ordered a root-and-branch review of the immigration system after the resignation of Ms Hughes.
The received wisdom is that "pocket book" issues - the economy, interest rates, inflation - and the state of public services hold the key to election victory. However, the parties are picking up some anecdotal evidence that voters could be influenced by immigration; a poll last month found 66 per cent of voters approved of Tory plans to set an annual limit.
Voters' hostility to immigration is hardening, with the British social attitudes survey discovering three-quarters now want a cut in the numbers allowed in.
By how much is the British population growing?
In 2003 net migration, the difference between people arriving and those leaving, was 151,000. That is up since 1997, Tony Blair's first year in power, when it stood at 46,800.
The Home Office argues that the sharp rise is not proof of incompetence, but the result of a deliberate policy to fill gaps in the labour market.
The Tory argument is that the population is heading fast towards 60 million, placing huge stress on public services.
Who are the immigrants? And how many of them are asylum-seekers?
The vast majority are so-called economic migrants, typically filling shortages in the NHS or taking seasonal jobs such as fruit-picking and bar work.
Some 13,830 were asylum-seekers, fleeing persecution in their home countries and given permission to stay in this country - that represented 28 per cent of the 49,405 asylum claims received in 2003.
What is the Government's attitude to economic migrants? And didn't that change yesterday?
Charles Clarke's predecessor, David Blunkett, was an advocate of using economic migration as a tool for tackling skill shortages. Although the new Home Secretary spoke up for the merits of economic migration yesterday, the five-year plan marked a change of emphasis, with low-skill migrants effectively warned they would have little chance of settling permanently in the UK.
How does Labour's approach to economic migration compare with the Tory position?
The Tories want to organise an Australian-style system, where points are awarded for work experience, academic qualifications and languages. They would set an annual quota linked to the points system.
Labour also proposes a points system, which would replace the current complex system of work permits, to judge the merits of applicants. But there would be no annual cap, with the Home Office arguing it needs flexibility to reflect changes in the labour market.
Are the Tories right that the asylum system is a `shambles'?
Successive Labour ministers have grappled with the unwieldy Immigration and Nationality Directorate. Under this Government's stewardship, huge backlogs of claims have developed, asylum applications hit a record 111,000 (including dependants) in 2002 and an ambitious target for removals was abandoned.
But the Government has made progress over the past three years; most initial decisions on asylum claims are now made within two months and the number of applications has halved.
What do the Tories propose as an alternative?
They will set annual quotas for the number of asylum-seekers who will be accepted. Their applications will be considered in offshore processing centres. They will pull Britain out of the UN refugee convention, which requires countries to consider applications on merit, rather than on need. They promise 24-hour security at ports to deter illegal immigration.
Where do the Liberal Democrats stand?
They agree there is a need for annual limits on economic migrants. The party proposes reform of work permits to introduce a limited "green card" system with the number of workers allowed in each year.
Work permits would be available to unskilled as well as skilled workers but would have strict time limits, with workers required to leave Britain when their permits expire.
They propose ending the ban on asylum-seekers working in Britain while their applications are processed and oppose measures to withdraw benefits from failed asylum-seekers.
The party promises a thorough overhaul of the asylum system to improve initial decisions and cut the huge number of appeals made by people refused leave to remain in Britain.Reuse content